HomeMy WebLinkAbout1999-03-17 Community and Economic Development Committee Minutes COMMUNITY& ECONOMIC DEVELOPMENT COMMITTEE
Wednesday, March 17, 1999 @4:30 PM
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COMMITTEE MEMBERS
PRESENT: Councilor Michael Aube, Chair
Councilor John Rohman
Councilor Judith Vardamis
OTHER
COUNCILORS
PRESENT: Councilor Patricia Blanchette
Councilor Nichi Farnham
STAFF
PRESENT: Edward A. Barrett, City Manager
Rodney G. McKay, Director of Community &Economic Development
Stanley Moses,Asst. C.D. Director
T.J. Martzial, C.D. Housing Programs Manager
Stephen Bolduc, Economic Development Officer
Peter D'Errico, Economic Development Officer
John Lord, Planning Officer
Dan Wellington, Code Enforcement Officer
Jim Ring, City Engineer
Norm Heitmann, Asst. City Solicitor
OTHERS
• PRESENT:
The meeting was called to order by Committee Chair Councilor Aube at 5:00 PM.
A motion was made to go into Executive Session.
ITEM#1 -Executive Session -Joint Meeting with BanAir Board of Directors
Review of Application for Business Development Loan-RC/BH, Inc.
A motion was made to go out of Executive Session.
ITEM#2 - Council Referral - Council Ordinance 99-121 Chapter 291, Article III, Schedule VI
of the Code of the City of Bangor-Handicapped Parking -Bangor House Parking Lot
A motion was made and seconded to recommend for approval. So voted.
ITEM#3 - Council Referral - Council Ordinarice 99-122 Amending the Building Code - Chapter
81 Section 81-1, to adopt the 1999 Edition of the BOCA National Building Code
A motion was made and seconded to recommend for approval. So voted.
ITEM #4 - Council Referral, Council Ordinance 99-123 Amending the Building Code - Chapter
81 Section 81-21,to adopt the 1998 Edition of the CABO One and Two Family Code
� A motion was made and seconded to recommend for approval. So voted.
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� ITEM#5 - Request for Crosswalk Warning Barrel at Hammond/Thirteenth Street Intersection
Police Chief Don Winslow reviewed this request, which was received from Mr. Ron
St.Pierre, to put a warning barrel in the crosswalk at Hammond and Thirteenth Street
intersection. The police department's experience with using these barrels is that they work well
in warning motorists of the presence of a crosswalk. The cost for each barrel is $110.
Councilor Aube, on behalf of Councilor Palmer, added for the record that Mr. St. Pierre
wanted to make sure that his case was heard and would try to make this meeting. He felt that he
hadn't been notified of the process involved. It was noted that Mr. St. Pierre was not in
attendance.
A motion was made and seconded to proceed with the warning barrel installation as
requested. So voted.
ITEM#6 -Authorizing Recording of Property Use Restrictions on a Portion of Bangor
International Airport
Staff reviewed an Order which will approve the recording of an Administrative Order of
Consent required by the Maine Department of Environmental Protection placing property use
restrictions on a portion of City property leased by GE. The restrictions are that no wells be dug
or excavation take place without approval by DEP. This is in order to minimize exposure to
public health and the environment to contaminants which may persist after remediation. The
� contamination originally occurred during prior military use.
A motion was made and seconded to recommend approval to City Council as presented.
So voted.
ITEM#7 -Maine Propane Energy Lease -Request to Extend Lease for Union Street Propane
Tank Location
This item was tabled.
ITEM#8 - Proposals for Reuse of Paramount Building "
Staff reviewed for Committee's evaluation the two proposals received for reuse of the
Paramount Building. The parties who submitted proposals aze: Szanton/MCD (Medical Care
Development) and House Revivers (Bob & Suzanne Kelley). MCD proposes to put in 11
apartments for people who have mental illness. They will have an elevator installed also. They
have a similar facility next door which appears to be a well-run facility. They propose no
acquisition cost other then$1 to the City. The Szanton/MCD proposed development costs are
$734,000; $110,000 will come from Maine State Housing Authority in loans; $177,000 from
Federal Loan Bank of Boston; Affordable Housing Program funds for$88,000 and City
financing which they have proposed would be $358,000. They hope to be able to obtain grants to
reduce the amount of funds they are proposing the City pay.
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� The Kelley project proposes commercial retail space for the first floor; 5-6 market rate
apartments for the upper floors. They will not have an elevator; they will not be providing
housing to any special interests and they have no tenants lined up at this time. The MCD
proposal would depend on subsidies for the tenants who need apartment assistance. Both groups
have proven they are qualified to carry out these projects. The Kelley's have done several in
Bangor. The Kelley's proposed improvement costs would be approximately $260,000 -they
propose to have investors put up $60,000, a private lender$100,000 and the City the other
$100,000. They are confident that they can carry out the project at the cost of$260,000 which
they propose.
Staff has discussed both proposals in length. The primary difference is the cost-MCD
proposes the City's financial share to be much higher. However,their plan is very marketable.
The Kelley project has no tenants at this time and are not sure of how marketable those units
would be. Staff stated that if the Council goes with the MCD proposal,that a limitation of City
funds would be available. The City's funds could come from either a combination of using a TIF
or for the MCD project using Community Development funding.
Committee asked that Staff bring back to the April 7 meeting data in terms of CDBG/TIF
funding and that they also meet with both parties to see if the amount of their requests from the
City can be reduced. Committee will then make a recommendation to the Council for their April
12 meeting.
• ITEM#9 - Review Request by Maine Department of Corrections for Space in the 6 Central
Street Building
Staff presented to the Committee a request from Mr. Barry Stoodley, Regional
Correctional Administrator for Youth Services of the Maine Department of Corrections, to lease
space on the third floor of the City's building at 6 Central Street. They would pay the state going
rate for rent. This space needs to meet State office space requirements pertaining to accessibility,
heat, ventilation and air conditioning (HVAC), none of which are present at any floor above the
mezzanine. The Department of Corrections has available work crews who can partition and
finish off the space needed,provided that a lower lease rate is available. The City, however,
would be responsible for providing a suitable entrance, elevator access and HVAC (heating,
ventilation and air conditioning). Carpenter Associates Engineers and WBRC
Architects/Engineers have provided Staff with cost estimates for the work at a total cost of � ',
$343,000. These costs are necessary in order to make leaseable any space above the mezzanine.
All of these costs could not be expected to be recovered from this one lease, however. Staff ',
suggests that it may be feasible to expend the estimated magnitude of funds as long as there is the ,
potential of leasing the remainder of the 2"d, 3rd, and 4`h floors. Mr. Stoodley's current lease at a '
nearby location will expire at the end of June of this year and he would like to have a date by '
which the space at 6 Central Street could be available so that he may obtain a lease extension.
Staff also indicated that the County Commissioners have expressed some interest in space '
� at 6 Central Street. They have indicated that they will need more office space in about 3-5 years.
Staff is in the process of obtaining more information as to their needs. David Giroux of Pro
Realty had written a letter to Staff stating that there is a sufficient surplus of office space in
Bangor and that the private sector should be filling those needs and not the City.
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� Discussion continued on the various aspects of this request as it would pertain to the
future viability of leasing remaining space and/or selling the building to a prospective developer.
Committee suggested that staff continue discussions both with Barry Stoodley of the Maine
Department of Corrections and with the County Commissioners as to their interest.
ITEM#10 -Assignment of Promissory Note and Assignment of Mortgage on 167-171 Center
Street
Staff reviewed the request from Peoples Heritage Bank for permission for the
assignments on the mortgage of 167-171 Center Street in order to protect their rights to recover
from the borrower. Peoples will pay the balance of the Community Development loans secrued
by the property. Staff recommended approval.
A motion was made and seconded to approve this request as presented. So voted.
Items 11, 12 & 13 were discussed jointly with action taken separately where necessary.
ITEM#11 -Agreement for Sale of Real Estate
Staff reviewed the agreement with RCBH Inc. for their interest in 77 Railroad Street and
relocation of the commercial refrigeration business. The arrangement that has been negotiated
� with RCBH Inc. calls for$114,000 for the building with an additional $18,000 to avoid the costs
that would be involved with an eminent domain proceeding. Under federal law they are eligible
for$10,000 for reestablishing their business to cover such things as stationery, new phones, etc.
The cost for moving their inventory totals $102,500. Relocation payments would be paid on a
scale that has been worked out between RCBH Inc. and the City Solicitor's office.
A motion was made and seconded to recommend for approval to the full City Council the
agreement of sale for the RCBH, Inc. property at 77 Railroad Street. So voted.
ITEM#12 - Indenture of Lease
This lease will allow the business owners of RCBH, Inc. to stay at 77 Railroad Street
until June 15, 1999 with permission for a one month extension if they need it. If RCBH, Inc.
does not honor this agreement they will owe back and front rent at the current value and other
associated costs.
A motion was made and seconded to accept this Indenture of Lease as presented. So
voted.
ITEM #13 - Business Development Loan Application - RC/BH Inc.
RC/BH Inc. to enable their move from 77 Railroad Street has decided to relocate to the
property at 739 Odlin Road for which they have a purchase and sale agreement for$250,000.
� Staff has had it appraised at$318,000. RCBH, Inc. is investing $50,000 into the purchase;
BanAir Corporation has approved a loan of$50,000 and $150,000 is being requested from the
City. The proposed terms of a loan from the City to RCBH, Inc. is that it be a 5-year loan based
on a 20 year amortization schedule at prime rate which is 7 3/4%with a balloon
5/ I'
payment at the end of 5 years. This money would be borrowed from the airport fund. Two III
� elements of the financing request from the airport fund are: 1)to finance $245,500 in acquisition '
relocation costs; and 2) finance the $150,000 loan. The $245,500 would be paid off in equal
installments over 5 years through the Economic Development Fund with interest. The $150,000
portion would be paid to the airport through the repayments by RCBH, Inc. including the
balloon payment in 5 years. Staff recommends that Council approves this.
A motion was made and seconded to recommend for approval this loan application to the
� full City Council. So voted.
ITEM#14 -New Neighbors Program Update
T.J. Martzial, C.D. Housing Programs Manager, reviewed for the Committee the New
Neighbors Program which will be expanded through designated areas in the City of Bangor.
There will be a meeting on April 14`h at the Civic Center to outline and explain this program to
those who will be involved in its application. Those invited include local realtors, bankers and
representatives from MSHA along with T.J. All Councilors will receive an invitation. T.J. also
noted that one of the 3 properties at Randolph Drive that will be considered later in the agenda
will be financed through New Neighbors.
ITEM#15 -Residential Rehabilitation Loan Subordination Request- 34 Jessie St., Single
Family
� T.J. Martzial presented this loan subordination request to the Committee. A motion was
made and seconded to approve this request as presented. So voted.
ITEM#16 - Authorizing Grant Application to the U.S. Environmental Protection Agency -
Brownfield's Assessment Demonstration Pilot Program
Notification on the availability of these grants was received recently. The City will apply
for$200,000 in grant funds for environmental testing and investigation of the coal tar deposits in
the Penobscot River and for the planning and design of site cleanup. This assessment will be
helpful in moving the dredging process forward. This application process is a competitive one.
Stan Moses, Asst. C.D. Director, is handling the application process and has requested letters of
support from the Maine Dept. Of Environmental Protection; Senator Collins, Senator Snowe and
Congressman Baldacci's offices; from the State Planning Office and the Shore Coastal Zone
Management Program and the Coast Guard.
A motion was made and seconded to recommend to the full City Council the
authorization of this grant application as presented. So voted.
ITEM #17 - Marketing Strategy
Postponed until further information is gathered by Staff.
� ITEM #18 - Code Enforcement Update
Updates were reviewed on: 1)the permit for the John Bapst handicapped accessibility
was sent out on 3/17; 2) Waterworks blue prints will be reviewed by Code Enforcement on 3/18.
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• ITEM #19 - Planning Update
Review of two zone change requests as follows. 1) change from URD to Multi-Family
and Service. The Planning Board has recommended this request for approval. 2) change from
URD-1, Single Family Residential to URD-2, Multi-Family zone. The Planning Board
recommended denial on this request.
A motion was made to go into Executive Session.
ITEM#20 -Executive Session -Property Disposition(on Items 21 & 22)
A motion was made to go out of Executive Session.
TEM#21 -Approval to Enter Purchase and Sale Agreement- 11 Maxwell Lane
Prospective buyers have offered $75,000 for this property as opposed to the asking price
of$77,000. Under the original terms agreed upon by the City and Staff,the prices established for
these properties are fixed. Staff recommends against selling this property at a reduced price of
$75,000.
A motion was made and seconded to recommend against accepting the lower price on this
property as presented; only the price of$77,000 will be accepted. So voted.
� ITEM#22 - Approval to Enter Purchase and Sale Agreement- 27 Maxwell Lane
Prospective buyers have agreed to the selling price of$71,000 for this property and are
going to finance it through Maine State Housing Authority (MSHA) under the New Neighbors
Program. Under the MSHA program,they require that the seller pay a"Sellers Fee" of 3 points
of the selling price which will be approximately $2,100 on this sale. Staff recommends that the
Committee approve this contract for sale.
A motion was made and seconded to approve the offer of$71,000 for the property at 27
Maxwell Lane as presented. So voted.
ITEM#23 - Approval to Enter Purchase and Sale Agreement- 19 Maxwell Lane
Prospective buyers have agreed to the selling price of$71,000 for this property with the
condition that the City pay all closing costs. Staff recommends that the Committee approve this
contract for sale but to remove the condition as presented.
A motion was made and seconded to accept the offer of$71,000 for the property at 19
Maxwell Lane exclusive of the condition of the City paying the closing costs. So voted.
� A motion was made and seconded to go into Executive Session.
ITEM #23 - Executive Session - Community Development Business Development Loan
Application
No action at this time.
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. ITEM#24 - Committee Action on Above Item
No action at this time.
ITEM#25 - Executive Session- Community Development Business Development Loan
Application
No action at this time.
ITEM#26 - Committee Action on Above Item
No action at this time.
Meeting adjourned at approximately 7:00 PM.
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